• Gold remains at an elevated level amid renewed hostilities in the Middle East.
• U.S. election uncertainty is making gold more attractive, with polls showing a tight race between Trump and Biden in key swing states.
• Rising U.S. Treasury yields and rebounding dollar cap gains, with DXY rising 0.29% and limiting further growth for the yellow metal.

The price of gold remains stable ahead of the weekend slow session in North America, rising 0.18% after reaching a record high of $2,758 on Wednesday. Increased tension in the Middle East and uncertainty surrounding the US elections make investors more and more willing to choose a metal that is a protected haven. At the time of writing, the XAU/USD rate is USD 2,740.

Geopolitics has dismissed US economic data as the main driver of price action. Hostilities continued Friday between Israel and Hezbollah near the Israel-Lebanon border. Israeli officials said the terrorist organization fired about 45 rockets.

Meanwhile, Israel attacked eastern Lebanon, leading to the closure of the Al-Qaa and Masnaa border crossings through Lebanese and United Nations officials. Israel has stated that their target is Hezbollah’s infrastructure.

According to CNN, US Secretary of State Anthony Blinken met with Middle Eastern leaders in London in an attempt to end the war in Gaza.

In addition, investors are also closely watching the US elections. Deutsche Bank analyst Jim Reid wrote: “Yesterday, an Emerson poll in several swing states gave Trump a slim lead, including a 1-point lead in Pennsylvania and Wisconsin and a 2-point lead in North Carolina. However, with the margin of error in these polls being just over three points, the race remains very close, as reflected in the various forecasting markets and forecasting models.”

Recently, U.S. Treasury yields have rebounded from intraday lows and moved into positive territory, holding back bullion prices. Additionally, Greenback is showing recovery as the US Dollar Index (DXY), which tracks the dollar’s value against a basket of six currencies, rose 0.29% to 104.32.

On the data side, the US Economic Report revealed that US robust goods orders declined in September. At the same time, the University of Michigan (UoM) revealed that consumer sentiment among Americans improved in October.

Daily Market Change Summary: Gold price remains stable despite higher US yields

• The 10-year U.S. Treasury yield rose two basis points to 4.23%.
• U.S. robust goods orders fell 0.8% month-on-month in September, better than the estimated decline of -1% and unchanged from the previous month.
• US consumer sentiment was better than expected in October, rising to 70.5 compared to the forecast of 69.
• The same study found that annual inflation expectations fell from 2.9% to 2.7%, while five-year inflation expectations remained unchanged at 3%.
• Data from the Chicago Board of Trade, based on the December federal funds rate futures contract, show that investors estimate the Fed will cut interest rates by 49 basis points (bps) by the end of the year.

XAU/USD Technical Outlook: Gold price rises above $2,740

The gold price remains on an upward trend, although it has strengthened around $2,708-$2,758 over the past four days, unable to break the lower top of the range.

Momentum indicators suggest that buyers are gaining strength and the Relative Strength Index (RSI) is reversing its decline and moving higher into bullish territory.

If XAU/USD clears $2,750, the next resistance level will be the year-to-date (YTD) high of $2,758. Once crossed, the next target will be $2,800.

On the other hand, if bullion prices fall below the October 23 low of $2,708, the next support will be the 38.2% Fibonacci Retracement level at $2,699, followed by the 50% and 61.8% Fibonacci Retracement levels at $2,681 respectively and $2,662.